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DATE

Friday, Aug. 7, 2026 at 11:00 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer - Helen Johnson-Leipold
  • Chief Financial Officer - Asad Rahman
  • Chief Marketing Officer - Andres Baptista

TAKEAWAYS

  • Net Sales -- $189.7 million, increasing 5% year over year driven by strength in the fishing and diving segments.
  • Fishing Revenue -- $150.0 million, growing 7% year over year reflecting healthy demand for Minn Kota trolling motors and strategic pricing actions.
  • Diving Sales -- $23.3 million, increasing 10% year over year due to strong performance in regulators and buoyancy compensators.
  • Camping & Watercraft Revenue -- $16.4 million, declining 13% year over year primarily because of weak marketplace conditions in these segments.
  • Gross Margin -- 45.3%, increasing 7.7 percentage points year over year largely due to $15 million in tariff refunds received during the period.
  • Operating Income -- $18.3 million, up from $7.3 million in the prior year quarter reflecting the impact of tariff refunds and sales volume growth.
  • Operating Expenses -- $67.6 million, an increase of $7.0 million from the prior year quarter due to higher sales-volume related costs and variable compensation.
  • Net Income -- $14.9 million, compared to $7.7 million in the previous year quarter reflecting improved operating profit.
  • Diluted EPS -- $1.42, up from $0.75 in the prior year third fiscal quarter.
  • Year-to-Date Revenue -- $525.1 million, a 15% increase versus the nine-month period last year.
  • Year-to-Date Profit Before Tax -- $32.2 million, compared to a loss of $4.3 million in the prior year period driven by gross margin expansion.
  • Cash and Short-term Investments -- $175.2 million, up $14.2 million over the prior year quarter.
  • Inventory -- $188.3 million, an increase of $24.5 million from the prior year quarter to support anticipated sales demand.
  • Capital Expenditures -- $16.4 million, compared to $11.8 million in the previous year quarter.
  • Effective Tax Rate -- 35.8%, an increase from 26.3% in the prior year quarter due to valuation allowances on U.S. income.
  • Projected Annual Tax Expense -- $5 million to $6 million, representing the full-year estimate shared by management for fiscal 2026.
  • Variable Compensation Expense -- $3.5 million, representing approximately half of the $7 million increase in quarterly operating expenses.
  • Interest Income -- $1.1 million, up from $0.9 million in the prior year third quarter.
  • Depreciation and Amortization -- $15.0 million, representing the year-to-date total as of July 3, 2026.
  • Other Income -- $2.1 million, increasing year to date due to investment gains and deferred compensation plan assets.
  • Debt Balance -- $0, reflecting management's statement that the balance sheet remains debt-free.
  • Dividend Status -- Approved by the Board in May 2026 and paid to shareholders on July 30, 2026.

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RISKS

  • CFO Rahman stated, "Excluding this benefit, gross margin would have been modestly lower than the prior year due to higher raw materials costs," referencing the impact of the one-time $15 million tariff refund.
  • CFO Rahman stated, "Increasing raw material costs is the headwind," noting that electronic industry component costs remain dynamic and require close monitoring.
  • CFO Rahman warned that "as the tariff landscape continues to evolve, we remain vigilant in managing potential cost impacts and are closely monitoring developments."

SUMMARY

Management at Johnson Outdoors Inc. (JOUT -0.20%) reported that total net sales rose 5% during the third fiscal quarter, primarily led by momentum in the fishing and diving segments. The company stated that operating income growth was significantly impacted by nonrecurring tariff refunds of $15 million, which also bolstered gross margins. Management indicated that the balance sheet remains debt-free with a cash position of $175.2 million, even as inventory levels were increased to support anticipated demand despite challenging conditions in the camping and watercraft markets. Strategic focus remains on innovation, digital engagement, and operational efficiencies to create long-term value.

  • CEO Johnson-Leipold stated, "Digital engagement continues to play an increasingly important role, enhancing connectivity between our SCUBAPRO brand, retail partners, and consumers."
  • CFO Rahman noted that the company does not anticipate additional meaningful tariff refunds following the $15 million recognized in the third quarter.
  • CFO Rahman stated, "Because of the valuation allowance on the U.S. income right now, we knew that the tax rate would be up and down each quarter."
  • CEO Johnson-Leipold noted that Minn Kota continues to be the leader in trolling motors, with quarterly results driven by healthy demand for its full product lineup.
  • Management confirmed that Jetboil remains a category leader in camp cooking despite the broader 13% decline in the Camping & Watercraft segment revenue.
  • CFO Rahman identified electronic industry component costs as a dynamic headwind that the company is actively monitoring to mitigate potential margin impacts.

INDUSTRY GLOSSARY

  • Minn Kota: A brand owned by Johnson Outdoors specializing in electric trolling motors, shallow water anchors, and marine battery chargers.
  • Humminbird: A brand focusing on marine electronics, including sonar fishfinders, GPS equipment, and marine cartography.
  • SCUBAPRO: The company's brand for professional diving equipment, including regulators and buoyancy compensators.
  • Jetboil: A brand specializing in portable outdoor cooking systems for camping and backpacking.
  • Buoyancy Compensator (BC): A piece of diving equipment used by divers to control their buoyancy in the water.
  • Trolling Motor: A self-contained unit that includes an electric motor, propeller, and controls, used on fishing boats for precise positioning and quiet movement.
  • Downrigger: A device used while fishing using the trolling method that places a lure at a specific depth.

Full Conference Call Transcript

Operator: Hello everyone, and welcome to Johnson Outdoors third quarter 2026 earnings conference call. Today's call will be held by Helen Johnson-Leipold, Johnson Outdoors Chairman and Chief Executive Officer. Also on the call is Asad Rahman, Chief Financial Officer. [Operator Instructions] This call has been recorded. [Operator Instructions] I'll now turn the call over to Andres Batista from Johnson Outdoors. Please go ahead, Mr. Batista.

Andres Batista: Good morning, and thank you for joining us for our discussion of Johnson Outdoors results for the 2026 fiscal third quarter. If you need a copy of today's news release, it is available on our website at johnsonoutdoors.com under Investor Relations. I also need to remind you that this conference call may contain forward-looking statements. These statements are made on the basis of our current views and assumptions and are not guarantees of future performance. Actual events may differ materially from those statements due to a number of factors, many beyond Johnson Outdoors' control. These risks and uncertainties include those listed in our press release and filings with the Securities and Exchange Commission.

If you have any additional questions following the call, please contact Asad Rahman or myself. It is now my pleasure to turn the call over to Helen Johnson-Leipold.

Helen Johnson-Leipold: Good morning, everyone. First of all, I would like to share that Asad Rahman, our new Chief Financial Officer, joined Johnson Outdoors on June 30th. This follows a planned retirement later this year of our longtime CFO, Dave Johnson, and we thank Dave for his many years of service and contributions to the company. I'm excited to have Asad on the call with us today. I'll begin by sharing perspective on the third quarter and year-to-date results, as well as give an update on each business. Asad will review the financial highlights, and then we will take your questions.

The strength of our market-leading brands helped us deliver solid third quarter results with total company sales increasing 5% versus the prior year quarter. Operating income was $18.3 million, $11 million higher than the prior year quarter, with approximately $15 million in tariff refunds received contributing to the improvement. Year-to-date, our net sales were 15% higher than last year's nine-month period, with operating income and gross margin also up for the fiscal year-to-date period. We are pleased with the results we delivered this quarter and the continued progress on our strategic priorities of innovation leadership, digital and e-commerce excellence, and operational efficiencies.

In our fishing business, Minn Kota continues to be the leader in trolling motors, and the quarter's results were driven by continued healthy demand for Minn Kota's full lineup of trolling motors. We are pleased with the momentum of our fishing portfolio. As always, we remain focused on investing in innovation and delivering differentiated technology that enhances the experience of the anglers worldwide. In our diving business, strong sales in regulators and buoyancy compensators helped drive a solid increase in third quarter sales. Digital engagement continues to play an increasingly important role, enhancing connectivity between our SCUBAPRO brand, retail partners, and consumers. Our focus remains on enhancing brand visibility, improving consumer engagement, and supporting our retail partners around the world.

Together, these initiatives strengthen the foundation of the business and underscore the enduring value of the SCUBAPRO brand. Finally, our camping and watercraft business faced a challenging quarter, primarily due to weakness in marketplace conditions. Jetboil remains a leader in camp cooking, and we're focused on capturing the many opportunities we see to further strengthen and expand the brand. With our Old Town brand, our portfolio of innovative, high-quality watercraft continues to resonate with consumers, and we remain committed to building on those strengths to drive sustainable growth over time. Overall, our results reflect the strength of our portfolio and the progress we are making against our strategic priorities.

By remaining focused on innovation, expanding our digital and e-commerce presence, and driving operational efficiencies, we are positioning the business to perform through a range of market conditions and create long-term value. Now, I will turn the call over to Asad for more details on the financials.

Asad Rahman: Thanks, Helen. Good morning, everyone. Gross margin for the third quarter improved to 45.3%, an increase of 7.7 points compared to the prior year quarter. The tariff refund of approximately $15 million contributed to this improvement. Excluding this benefit, gross margin would have been modestly lower than the prior year due to higher raw materials costs. Looking ahead, we do not anticipate additional meaningful tariff refunds, and as the tariff landscape continues to evolve, we remain vigilant in managing potential cost impacts and are closely monitoring developments. Operating expenses increased $7 million from the prior year third quarter, due primarily to increased sales volume related costs as well as increased variable compensation costs.

Profit before income taxes for the third quarter was $23.3 million compared to $10.5 million in the previous year quarter, driven mostly by the factors I just mentioned. During the quarter, we increased inventory levels to support sales demand. Our inventory balance at the end of the third quarter was $188.3 million, up about $24.5 million from the previous year third quarter. Year-to-date, gross margin is 40.6%, up 5.8 points from the prior year-to-date period. Tariff refunds, pricing actions, improved overhead absorption, and cost-saving initiatives more than offset higher material costs to drive margin improvement in the current year-to-date period. Our ongoing strategic cost savings program remains critical and continues to deliver meaningful benefits to our bottom line.

Profit before income taxes on a year-to-date basis was $32.2 million compared to a loss of $4.3 million during the previous year period, which resulted in an increase of approximately $36.5 million as a result of the strong gross margin improvement mentioned earlier. Looking ahead, we remain focused on actively managing the business to balance near-term pressures while continuing to invest in priorities that support sustainable growth. Our balance sheet remains debt-free, and we continue to pay a meaningful dividend to shareholders with the Board approving our most recent dividend announced in May. Now, I'll turn the call over to the operator for the Q&A session.

Operator: [Operator Instructions] Our first question comes from the line of Anthony Lebiedzinski of Sidoti.

Anthony Lebiedzinski: It's really nice to see the results, especially in fishing and diving. So maybe first we could just talk about how the quarter progressed from April to June and any early reads so far how July was?

Helen Johnson-Leipold: You know, we had varied results, you know, across the business, but we feel good that plans for innovation have kicked in, but, you know, the market is very complex. We're not going to give any forward-looking statements, but, you know, the momentum is good, and we're keeping focused on strategic priorities. So, you know, hopefully things continue.

Anthony Lebiedzinski: Okay. And then can you just talk about the pricing actions, um, and the impact they had on the fishing revenue?

Asad Rahman: Pricing was a factor this quarter, and we did strategic pricing where it made sense for our products, keeping in mind the consumer and demand dynamics.

Anthony Lebiedzinski: Understood. Right. And then, so as you mentioned, you know, the gross margin excluding the tariff refund came in, you know, just slightly below, relatively in line with a year ago. How do we think about gross margins here kind of going forward? Maybe if you could just go over the various puts and takes that we should be mindful of.

Asad Rahman: Yes, gross margin, as you mentioned, was flattish, excluding refunds. Pricing and cost savings continue to be a good factor for us. Increasing raw material costs is the headwind. We, like many companies, electronic industry component costs are dynamic for us, and that's something we are monitoring. But it is a good thing that our cost savings efforts in place are there to help offset that.

Anthony Lebiedzinski: Got it, understood. Okay. And then just switching gears to the operating expenses, so they did come in higher than what we had expected and were up 11.5% from last year. I know you touched on this a little bit as far as the increased sales and marketing costs, as well as variable compensation expenses. If we were to separate those two, what was the larger factor driving the higher operating expenses? And then just broadly speaking, how should we think about operating expenses going forward?

Asad Rahman: Yes, roughly half of that was related to the variable compensation cost. The rest was related to volume-related costs and other expenses. We continue to manage our expenses prudently while investing in key priorities that are the right things to set us up for long-term success.

Anthony Lebiedzinski: Got it. All right. And then lastly for me here, so the tax rate has jumped quarter to quarter so far this year. Any kind of estimate how to think about the tax rates for the fourth quarter and any perhaps early read for fiscal '27 as to how to think about the tax rate?

Asad Rahman: Yes, because of the valuation allowance on the U.S. income right now, we knew that the tax rate would be up and down each quarter. To think of it practically, for the full year, it's going to be about $5 million to $6 million of tax expense for the year.

Operator: I'm showing no further questions at this time. I'll now turn it back to Helen Johnson-Leipold for closing remarks.

Helen Johnson-Leipold: Thank you all for joining us and have a good day. Thank you.

Operator: Thank you for your participation in today's conference. This concludes the program. You may now disconnect.